Every once in a while, a court
issues a decision reminding us that we may have rights we’ve never known about
or sought to assert. This time the Trademark Trial and Appeal Board (TTAB) has
given the New York Yankees more than they initially sought to claim for
themselves.

Last month, a panel of TTAB
judges held that the New York Yankees could prevent Evil Enterprises, Inc. from
using the phrase BASEBALLS EVIL EMPIRE on clothing because the public had, in
fact, come to regard the New York Yankees as, the “evil empire” of Major League
Baseball.

The AG sent notices of
non-compliance to offending entities (a sample notice letter can be found here).
In December, selected lawsuits were filed (e.g., Harris’ action against Delta).
Recently, the Attorney General’s office released Privacy on the Go, a set of guidelines
to help those involved in mobile app development, distribution platforms, and
advertising to better understand how to meet California’s OPPA’s requirements.

Because so many companies market
their goods and services online, owners and management naturally expect that their
branded websites will be good specimens to support their applications for
trademark registration and extensions. Websites are usually excellent and
appropriate demonstrations of the use of a trademark.

But, companies are
well-advised to use extra care when submitting a website sample as a supporting
specimen for trademark registration; the USPTO’s examination of them is
especially exacting. If it finds the specimen insufficient, the consequence may
be long delays in the application process and possible rejection of the mark.

As background, trademarks are intended to
protect consumers from confusion about the source of goods and services. US
trademark registration is based on use in
interstate commerce, and requires a declaration that a mark is in actual use
in order to entitle a would-be trademark holder to final registration. To demonstrate
use in commerce, applicants submit samples showing the brand being employed to
actually sell, or offer for sale, the goods or services in question. An appropriate
specimen for goods might be a product’s packaging or a point of sale display showing
the mark affixed to or next to a product and the price at which it is offered
to consumers. For services, a brochure or advertisement might describe a
company’s service, its pricing structure and how the service is contracted for.

Applicants must take heed that
the USPTO applies not only a “commerce,” but also an “interstate commerce”
requirement. Worldwide websites often seem the obvious solution to the
requirement that a specimen show use in multiple states. But according to
recent guidelines
released by the USPTO, websites will only suffice under certain fairly defined
circumstances.

First, the sample must contain
either a picture or textual description of the goods or services offered. Also,
if the website is intended to demonstrate use of the mark for goods or services
in several classes of use, i.e. kitchen equipment (Class 21), aprons (Class 25),
and cooking classes (Class 41), each
class must be represented in the specimen provided.

A shot from American Apparel's homepage showing their mark,
goods associated with it, and a link to order them.

Second, the mark must be prominently displayed in the
website specimen on or next to the associated goods or services. What does
prominently mean? Applicants should
ensure that the website distinguishes the mark from surrounding text by using a
different font, stylization, color, or position. The mark should look like a brand for the goods or services.

Finally, the web specimen should provide the information necessary to purchase the goods or
services. This typically includes their price as well as a method for ordering
them, such as a 1-800 number, an order form, or “checkout” button.

Having a web specimen that incorporates the requisite elements will significantly streamline the registration process. Months can pass before the USPTO issues its office action to inform an applicant that a specimen is deficient. Then the applicant is challenged to find an appropriate specimen that was in existence at the time of the use date stated in the application. If an owner expects a website to support a trademark application or a demonstration of continued use, a company and its web developer should consider these trademark application standards at the time the website is being constructed. These best practices go a long way toward efficiently establishing the trademark protection companies value.

Mobile app developers frequently
need to update their Terms of Use, prompting the familiar but often ignored, “Terms
& Conditions Have Changed” iPhone alert. The updates usually accompany new
technologies and services, and do not represent policy shifts or noticeable
service changes; hence the heedless recipient. But as the recent Instagram controversy
shows, providers should avoid hiding big changes in small print.

Instagram is a mobile application
downloaded by more than 80 million users to date. It allows users to stylize
and share photographs and other images using a variety of preset filters. Late
last year, Instagram unveiled its new Terms of Use policy that included
the following clause:

“You
agree that a business or other entity may pay us to display your username,
likeness, photos (along with any associated metadata), and/or actions you take,
in connection with paid or sponsored content or promotions, without any
compensation to you.”

Thus, it seemed, by uploading photos to
Instagram, users were deemed to have consented to use by others of the images for
advertising materials.

Do
your mobile apps run afoul of California’s privacy laws? About one hundred mobile application
developers are discovering that their products might be “illegal,” and many
others now have to worry. California
Attorney General Kamala Harris, consistent with her commitment to consumer
privacy interests, has begun to send non-compliance
letters to companies like United Airlines and OpenTable, whose applications
not only offer consumers the convenience of tracking their flights or making
dinner reservations, but also collect information about their preferences
through their smartphones. The letters,
which the AG’s office started sending in November, warn of a $2,500 fine for
each copy of a non-compliant app downloaded by a California consumer. Developers were given thirty days to respond.

This is yet one more
battleground as the law tries to catch up with the pace of technology (and vice versa). At issue is whether the privacy policies
these companies must post are conspicuous and reasonably accessible for
consumers. The
California Online Privacy Protection Act (“CalOPPA”) requires that mobile
application providers (“online service providers” within the language of the
Act) post privacy policies describing the “personally identifiable information”
(“PII”) their products gather, how that information will be used or shared, and
the processes in place for a user to review and edit their PII.

The CalOPPA
also requires this disclosure to be “reasonably accessible” to consumers. For companies developing mobile applications,
providing a privacy policy website, accessible only outside of the app, may not
be enough. Mobile developers must either
post the policy or include a link to the policy within the app itself.

Harris’
action follows an agreement
reached in February with Amazon, Apple, Google, Hewlett-Packard, Microsoft and
Research In Motion, which together comprise the bulk of the mobile application
market and are the industry’s largest accumulators of consumer data. These six developers agreed not only to formulate
privacy policies compliant with the CalOPPA’s requirements, but also to make
these policies available to consumers before
they download the application.

LinkedIn's in-app privacy policy

Going
forward, entities developing applications that capture Californians’ personally
identifiable information must carefully examine their privacy practices to
avoid enforcement action by the California Attorney General. Best practices include a carefully drafted
privacy policy that clearly articulates what information an app will gather,
how it will be used, whether and when it will be shared, and the consumer’s
right to review and edit their collected data.
The policy should be accessible within the application, either on a
separate screen or through a link. A
company may also choose to make the policy automatically available to consumers,
in advance,on the platform from which the application is purchased (e.g., Apple’s
App Store or GooglePlay) in order to bring itself in line with standards now
being set by the large corporations that have already worked through the
particulars with the AG’s Office.

There is a further
caveat for app developers and providers.
Don’t forget that privacy policies create their own teeth and can bite
back. That is, a policy may be held to
constitute a contractual obligation between the company and the consumer who
agrees to it. Thus, failing to provide
the protections that a policy promises may subject a provider not only to an
enforcement action from the Attorney General’s office (when, for example, the
CalOPPA has been violated), but also to claims by consumers (perhaps many
thousands of them in the case of a popular app) that a contract has been
breached. For example, in Claridge v. RockYou (2011), a judge
in the Northern District of California allowed a class action to go forward
where RockYou represented their servers as “secure” in its privacy policy
despite its knowledge of security issues with its database. RockYou later settled
the action.

Although
the Los Angeles Times reports that the state will “give app makers time to
craft a privacy policy and fall into line with California law,” Harris has sent
a clear message: her newly created Privacy Enforcement and Protection Unit will
enforce the Golden State’s privacy laws.
A barrage of warning letters may sound relatively benign, but this is an
opening salvo to what appears to be a vigorous litigation strategy. On December 6, the Attorney General sued
Delta Airlines in a San Francisco Superior Court for its failure to respond to a
thirty-day warning letter concerning its Fly Delta app for mobile devices. The complaint
alleges that Delta’s application stores users’ credit and debit card information,
geo-location information and photographs, and that Delta has “knowingly and
willfully” or “negligently and materially” failed to disclose how it collects,
manages, or shares this information. The
lawsuit seeks $2,500 in damages for each violation of the CalOPPA, which
could quickly add up to given the fact that the Fly Delta app has been
downloaded by millions of users already.
With the swiftness of the Attorney General’s action and the extent of
relief that CalOPPA affords, any business seeking to reach California consumers
through a mobile app must take heed. And
as we know, especially in the technology world, as California goes, so goes the
country …

Will
your image live longer than you do? Artists,
celebrities, and other creatives often invest substantial time and effort
cultivating a personal brand image, and most likely anticipate its longevity. The law recognizes a person’s right to profit
from this investment by preventing third parties from “free riding” on a famous
individual’s name or likeness. A
majority of states recognize this “right of publicity,” but vary as to whether
this right should outlast its initial rightsholder and for how long. In some, like New York, the right is
extinguished with the death of the individual.
But in others, including California, the right of publicity constitutes
personal property that can be passed on to ones’ heirs.

Copyright Office considers new proposals for a copyright small claims court, but specifics are still lacking.

The story is familiar to many artists. A freelance photographer is surprised to find that an online service has reproduced a number of copyrighted images from her website. She reaches out to the organization with phone calls, offers to license her work for what she considers a reasonable fee, and drafts her own “cease and desist” letter. These all go unanswered. Realizing that her only remedy may be to sue, she seeks out an attorney who will file her case in federal court. But the case is too small; attorneys’ fees are high; it would take at least a year to litigate; and the recovery, if she wins, is uncertain. In the end, she simply gives up.

In 2006, the United States Copyright Office brought stories like these to the attention of Congress. In a statement before the subcommittee on intellectual property, the Office noted the costs associated with the federal court system, which has exclusive jurisdiction over copyright cases, and concluded that “[it] is reasonable to ask whether federal courts are hospitable to most small claims.” Two years later, Congress directed the Office to study the creation of a special network of courts that would hear low-value copyright claims. As part of its research, the Copyright Office asked for input from interested parties in the creative community. That commenting period just ended on October 19, and the opinions of artists’ rights organizations, corporations, and intellectual property scholars are ready for review.

Copyright owners, such as the photographer in our example, would generally like to see an inexpensive, easily accessible forum with robust powers to grant and enforce judgments. Reduced cost and ease of access, they argue, will lead to meaningful enforcement of intellectual property rights. On the other hand, some worry about the potential danger to small-scale defendants who often settle rather than engage in expensive, lengthy litigation, even if they have valid defenses. They suggest that a copyright small claims court may end up a mechanism for powerful interests to extract settlements from unsophisticated defendants.

Proposals submitted thus far address these concerns and others. Foremost among them are the questions of how independent a court of small claims would be, whether it would limit the role of attorneys and the discovery process, whether it would be a voluntary option or mandatory, and where the cap on monetary damages would be placed.

Although the debate continues, a consensus has emerged with respect to at least some of these issues. For example, a majority of commentators agree that such a court should be instituted outside the federal court system, either at the Copyright Office, or as an independent administrative agency. State courts do not present a viable alternative since their dockets are already crowded and state court judges have relatively little experience with copyright law. However, the field is far less unified when it comes to the questions of attorneys, attorneys’ fees, the permissible amount of claims, and the right of appeal.

Recently, the United Kingdom instituted its own “small claims track” in the Patents County Court, which may offer some insight. The “small claims track” provides a venue for suits under £5,000 where neither lawyers nor experts are required and the rules of evidence are less strict. Further, judges may grant either monetary damages or permanent injunctions, but are prohibited from entering preliminary injunctions or awarding attorneys’ fees in excess of £200.

While copyright holders laud the UK’s new “small claims track,” it is unlikely that a comparable court will be established in the United States any time soon. As a next step, panels in New York and Los Angeles will meet next month to consider specific aspects of the many proposals offered. As the discussion progresses, the many questions raised are sure to receive a hard look from interested parties, and the debate is bound to intensify.

Update: the Copyright Office is extending the time to submit requests to participate in the public meeting to consider remedies for small copyright claims in Los Angeles on November 26 and 27, 2012. Requests to participate are now due by November 9, 2012.

About

Lizbeth Hasse is the managing partner at Creative Industry Law. Her practice encompasses intellectual property, media, entertainment and business counseling for corporate and individual clients. She is also a neutral expert in these areas, negotiating and resolving IP, business and media matters. Learn more by visiting Ms. Hasse's LinkedIn and Avvo profiles. Click on the icons provided below.